Category: Policy Updates

“Open Payments” Website Missing $1 Billion

Just yesterday, we discussed the federal government’s intrusive and mischievous Open Payments website, where payments for consulting and similar services provided by doctors to pharmaceutical and medical-device makers are publicized.

If the people really demand this information, then I recommended that government payments be included at the same website. After all, if people suspect that companies paying experts for their services is inherently corrupt, then they should have the same suspicion of government payments.

The relevant industries, represented by their trade associations (PhRMA, AdvaMed, and BIO) have bought into the Sunshine Law which created the Open Payments database. However, the flawed roll out of the website led even them publicly to express “concern” with the database.

Federal Health IT Standards Pushed Back Yet Again

Sometimes deadlines just slip. The federal government’s deadline for providers certifying “Meaningful Use Stage 2″ in order to get federal funding for their electronic health records (EHRs) has just been bumped yet again:

The Centers for Medicare & Medicaid Services has reconsidered its original position not to extend the deadline for applying for Meaningful Use hardship exemptions and reopened the application submission period through Nov. 30, according to an announcement.

Eligible hospitals (EHs) and eligible professionals (EPs) who have not attained Meaningful Use and have not been granted a hardship exception are subject to “payment adjustments” of their Medicare reimbursement beginning Oct. 1 for EHs and Jan. 1, 2015 for EPs. The previous deadlines for submitting hardship exception applications had been April 1 for EHs and July 1 for EPs.

States’ “Right to Try” Laws Have a “Strange Allure”

Writing in JAMA: Journal of the American Medical Association, Patricia J. Zettler, JD, and Henry T. Greely, JD, both of Stanford University, criticize the “strange allure” of states’ laws that recognize patients’ “right to try” new medicines before the Food and Drug Administration (FDA) approves them.

These laws should help patients get access to medicines that the FDA forbids. However, these lawyers point out that the FDA’s power may overwhelm these laws:

Despite the attention they have received, right-to-try laws are unlikely to give patients more access to unapproved drugs or devices. Under the “Supremacy Clause” in the US Constitution, federal law trumps conflicting state laws. For example, states can repeal their laws against medical (or nonmedical) use of marijuana, but the federal government may still arrest and convict people in those states for violating medical marijuana prohibitions. Although the federal government has chosen to limit its enforcement of federal marijuana laws in certain circumstances, the FDA is unlikely to ignore unauthorized use of unapproved products, especially because the agency already provides physicians with a regulatory pathway for compassionate use.

GAO Says Congress Can Stop Obamacare’s Health Insurer Bailout

Yesterday, the General Counsel of the U.S. Government Accountability Office (GAO) supported the requirement that the Administration needs appropriations to bail out insurers who lose money in Obamacare exchanges in 2015, via risk corridors:

HHS stated that it intends to begin collections and payments under section 1342 in FY 2015. However, as discussed above, for funds to be available for this purpose in FY 2015, the CMS PM appropriation for FY 2015 must include language similar to the language included in the CMS PM appropriation for FY 2014.

This is a very positive development towards protecting taxpayers’ from the unlimited liability to which Obamacare exposes us by protecting insurers’ income statements from losses in Obamacare exchanges. The Administration had assured us that the risk corridors would be budget neutral, but that was not written into the law.

Is the FDA Even Capable of Regulating 21st Century Medical Devices?

The pace of innovation in medical devices is breathtaking. The most exciting developments are in mobile health. One year ago this month, the Food and Drug Administration (FDA) issued its final regulations on mobile medical apps. So far this year, the FDA has approved 23 medical apps that the editors of MobileHealthNews define as “notable.”

The role of the FDA in preventing such apps from reaching patients is of great concern. Mobile technology is so well integrated with other technologies that we now take for granted that FDA regulation of these apps risks giving the FDA power over tools that we’ve used conveniently for years. Many were relieved when the South Korean FDA announced in March that it would not regulate Samsung’s latest Galaxy smartphone!

Massive Momentum for Mega-Mergers in Health Care

Paul Keckley of Navigant Consulting summarizes the rapid pace of consolidation within U.S. health care:

“Go big or get out” seems to be a mandate across the health system these days. Across the continuum of healthcare products and services, consolidation is a given. Consider:

  • Total enrollment of the top 10 insurers increased from 20% in 2003 to 46% in 2011
  • The share of total revenues for pharmacy benefits management services for the top 2 Pharmacy Benefit Managers increased from 27% in 1999 to 61% in 2012
  • The numbers of physicians practicing in groups of 5 or fewer physicians decreased from 66% in 2001 to 51% in 2012, while physicians in groups of 100 or more increased from 3% to 12% in the same period
  • The employment of physicians in medical practices owned by hospitals increased from 24% in 2004 to 49% in 2011
  • The numbers of hospitals in multi-hospital systems increased from 53% in 2003 to 60% in 2013.

Federal Health IT Standards Still Taking On Water


Last May, this blog discussed the proposed watering down of standards for hospitals and other facilities to get federal bounties for so-called “meaningful use” of electronic health records (EHRs) in 2014.

Well, they appear to have done it again. In a final rule that affected both 2014 and 2015, the Office of the National Coordinator of Health Information Technology (ONC) announced that: “Health information technology (IT) developers, providers and consumers will get more flexibility through a final rule issued on Sept. 10, 2014.”

Roche Take-Over of InterMune A “Rebuke” to FDA

The Wall Street Journal editorial board has an interesting take on Roche’s takeover of InterMune, calling it a “rebuke” of the FDA:

Amid this summer’s M&A fever, Roche’s agreement Monday to buy the San Francisco biotech InterMune ITMN -0.05% deserves special notice. The tie-up is an $8.3 billion guided missile into the fortified bunker that is the Food and Drug Administration.

InterMune has never turned a profit in 16 years of existence and other than its clinical expertise the company holds a single asset: an idea for treating a lethal lung disorder called idiopathic pulmonary fibrosis with no known cause, cure or approved therapy — at least in the U.S. An InterMune drug called pirfenidone that slows the progression of irreversible lung scarring is on the market in Europe, Japan, Canada and even China.

Federal Medicare, Medicaid, Obamacare Subsidies to Increase 85 Percent in Ten Years

On Wednesday, the Congressional Budget Office (CBO) released its Update to the Budget and Economic Outlook: 2014 to 2024

Annual net outlays for the government’s major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies for health insurance purchased through exchanges) are projected to rise by more than 85 percent. Outlays for those programs would grow from 4.9 percent of GDP to 5.9 percent, CBO anticipates.

Spending for Medicare’s payments to physicians is constrained by a rate-setting system called the sustainable growth rate. If the system is allowed to operate as currently structured, the fees that physicians receive for their services will be reduced by about 24 percent in April 2015…If, instead, lawmakers overrode those scheduled reductions — as they have every year since 2003 — spending on Medicare would be greater than the amounts projected in CBO’s baseline. For example, holding payment rates through 2024 at current levels would raise outlays for Medicare (net of premiums paid by beneficiaries) by $131 billion (or about two percent) between 2015 and 2024.

HSA Update: Assets in Health Savings Accounts Almost $23 Billion in June

Key findings from the Midyear Devenir HSA Research Report:

  • HSA assets almost reach $23 billion. HSA accounts rose to 11.8 million, holding assets totaling over $22.8 billion, a year over year increase of 26% for HSA assets and 29% for accounts for the period of June 30th, 2013 to June 30th, 2014.
  • Health plans drive growth. In the first half of 2014, health plans were the leading driver of new account growth, accounting for 31% of new accounts.
  • Continued strong stock market bolsters HSA investments. HSA investment assets almost reached an estimated $2.9 billion in June, up 45% year over year. The average investment account holder has a $12,473 average total balance (deposit and investment account).
  • Investors show solid returns. Investors achieved a 10.6% return on a 5 year basis.